An eventual merger between the two telecom companies would create "meaningful" synergies but may take several years to realize, UBS' John Hodulik commented in a report. The integration costs will likely be around $7 billion spread out of three years and would combine for around 30 percent of the postpaid phone market and hold a market leading 40 percent share in the prepaid category.

The companies would also combine for approximately $55 billion in revenue, grow at a low-single digit rate, generate a cash EBITDA of $25 billion which includes $3.5 billion a year in run-rate synergies, the analyst said. By 2020 the combined entity's pro forma free cash flow per share could come in at $7.30.

On the other hand, the combined entity would also trigger the spectrum cap in most of the biggest markets, which implies a divestiture of some sort would be necessary, Hodulik noted.

Both AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) will "benefit operationally" from near-term disruption as the result of the merger, the longer-term impact to their respective businesses will depend on any deal remedies and the potential creation of a stronger entrant to the market.

Finally, the likelihood of the merger passing "remains far from certain" (50 percent likelihood) and the path towards approval would likely cause T-Mobile and Sprint's stocks to both "trade at a steep discount to their pro forma value."